Category Archives: Business

Best Intervention for Fyre Festival of Pizza

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pizza-festivalA fellow named Ishmael Osekre organized a pizza tasting festival in New York City which is being compared the failed Fyre Music festival held in the Bahamas. I’m not going to get into detail on the failings of the festival, suffice it to say serving tiny slices of cold, miserable pie to a New York pizza savvy crowd is going to be a disaster. What I’d like to discuss is the best remedy to this situation? Social Media? Government?

The first avenue is that of Libertarian dreams, Social Media. Such Gotham users are in an uproar about the event. Facebook, Twitter, and more are alive with people complaining about the scam and demanding their money back. The organizers eventually promised to create a makeup date but that is doing little to appease those wronged. As one of those aforementioned Libertarians, I’m quite pleased with this turn of events.

That being said, there are realities to embrace. Osekre might well pack bags and depart, leaving everyone out not only the money they paid but also the time they spent attending the event. In addition, such visitors might well have done something else that day of greater value. Social Media can certainly shame such a fraudster. It can spread the word so that the perpetrator will have a difficult time attempting the same in the future.

However, it is still quite possible for Osekre to change names, move to another city, and attempt the scam yet again. Each time he might steal money from those who want to attend such festivals. I think Social Media makes this far more difficult, but it is still possible. This is where government enters the picture.

Alerted to the travesty by Social Media, the Attorney General of New York is investigating and considering charges. Legal remedies are something beyond the power Social Media. If Osekre collected money but did not provide the expected service, that is a crime called breach of contract. Even if the festival was created in good faith but Osekre simply underestimated the popularity, the people who paid money were still defrauded.

My question then becomes; what is government going to do about it? The courts might well find Osekre guilty of a crime and sentence him to prison. They might order him repay the festival goers. The thought of punishing Osekre with imprisonment certainly appeals to the vengeance part of my brain. The possibility of people getting their money back is certainly a reasonable outcome. I’m not convinced people will ever get their money back. The money is probably already largely spent and there is little way to recoup the losses.

It seems to me there is room for both remedies and one creates justice where the other fails, they complement one another. We live in this brave new world in which the collective has far more power than it ever has in the past. Prior to the advent of the Internet and the rise of Social Media, scam artists like Osekre could simply travel from place to place perpetuating the same crime again and again. It was up to government to stop such fraudsters.

In the past government often failed to do so. In fact, government not infrequently became complicit with the fraudsters as long as they were cut in on a share of the profits. This sort of thing still happens on a fairly regular basis. Social Media can force government to be held accountable in a way never before seen in human history with the notable exception of violent revolution. In the same way, Social Media can hold criminals such as Osekre accountable for their crimes, or at least make it far more difficult for those like him to continue on with their nefarious schemes.

To my mind, this is a wonderful synergy. Government and the people working together to implement justice. This dual defense brings us perhaps as close as we’re ever going to get to true justice. Count me in.

Tom Liberman

Gold Trade Spike and Conspiracy Theories

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goldSomething interesting happened in the gold, or bullion, market when someone traded over 18,000 lots and sent the price down by 1.6% in about a minute. This sort of volatility is unusual but had no long-lasting ramifications. When I read comments on the story I was struck by the fact almost immediately the most suggested theories were conspiracy based.

When reading about what happened, it becomes clear gold traders are completely unalarmed and know precisely the reality of the situation. Someone tried to trade 18,149 ounces of gold but accidently chose to sell the same number of lots. A trade of this nature in ounces is quite typical. Gold is currently a pretty flat commodity without much movement or trading and thus the larger trade, a lot is about equivalent to a hundred ounces, was unusual.

I find this incredibly interesting. The logical and rational explanations, well clarified in the article, fall on completely deaf ears. There are quite a few people who are invested in various financial collapse schemes. These people want your money. They want you to be convinced an imminent downfall is coming and the price of gold will spike. They want people to be scared, because frightened people are fleeced of their money all the more easily.

These sorts of doomsayers have been around for as long as we have written records. They’ve always had the same motives. I think it’s highly unlikely the people commenting on these stories are those who will reap the financial windfall cascaded on them by willing fools. The conspiracy commenters are merely unwitting agents and future victims.

There is no great financial collapse coming. Buying gold is not going to make you rich. No one is manipulating the market. The only easy way for you to make millions of dollars in the commodity market is to understand human frailty. People are easily frightened and, when so, lurch as a pack toward a single objective. I’m reminded of watching a soccer game where the competitors are all about five or six years of age. They chase the ball as a herd. If a couple of players are smarter and more skilled than the rest they can easily use this tendency to score goal after goal.

That being said, it’s your money. Do with it as you will. If you want to purchase gold, or anything else, because you believe disaster is right around the corner, far be it from me to stop you. I don’t begrudge those who understand how things work their profits. To the smart go the spoils.

Tom Liberman

Why did General Grigsby Get Demoted for Having an Affair?

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general wayne grigsbyGeneral Wayne W. Grigsby Jr. was demoted from Major General to Brigadier General for having an affair with another officer. He is the sixth such general in the last year to be demoted for such activity. Why? What about marriage infidelity would cause him to do his job less effectively? Why should anyone be demoted from their position? I think it’s an interesting question.

Don’t get me wrong, I think the army, or any employer, has the right to discipline their employees as they see fit as long as it doesn’t run afoul of the Constitution of the United States. However, I think it’s important to keep people who are good at their jobs in their positions even if they have human failings. We all have human failings. We all lie. We all make mistakes. In the military, there are potentially lives at stake. If Grigsby Jr. is an outstanding officer in every way, demoting him is detrimental to the military.

It’s also entirely possible Grigsby Jr.’s wife was perfectly happy for him to have affairs. It wouldn’t be the first marriage where such things were tolerated. It’s a well-known fact one of the finest generals in the history of the United States, Dwight Eisenhower, carried on a long-term affair with his secretary. Would the country have been served by firing or demoting Eisenhower?

To be fair, it’s certainly likely having an affair can cause real issues in a command. It’s entirely possible there was good reason to demote Grigsby Jr. Certainly the circumstances of this case seem to indicate the demotion might well have been justified. That his behavior was negatively affecting his ability to command. I’m just worried by the fact so many officers are getting removed from their position for this personal issue.

I guess what I’m saying is that I’d be more comfortable if the military stopped using having an affair as the excuse to demote officers. Let’s judge people by the job they are doing. If the officer has lost control of his command, demote her or him for that reason. If the affair is having a detrimental effect on the other soldiers, demote for that reason.

What concerns me more is that I consider it undeniable the military is quite aware other officers are having affairs and is not doing anything about it. This smacks of cronyism. The officers in good standing are allowed to have their affairs while those who fall out of favor are subject to a strict interpretation of the rule. Even if this isn’t happening, even if the military only moves to make changes when the affair becomes detrimental to the command of the unit; there is the appearance of impropriety.

When the military first demoted Grigsby Jr. they cited lack of confidence in his ability to control his command. Good enough for me. Why elaborate? Why have specific examples of behavior that will result in potential issues? Because then you have to be consistent. If you punish one officer for doing something, you must punish all who behave that way. At least if you want to be consistent.

The question should simply be if the officer doing a good job.

Tom Liberman

What Nepali Tea Teaches Us about Government

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teaLet me be clear, I enjoy a fine cup of tea. Much to my chagrin, I just learned I’ve never tasted a tea called Orthodox Tea which grown in Nepal. The reason I’ve never enjoyed this tea, the reason most tea lovers have not, is because of a repressive and totalitarian government. In addition to limiting my tea enjoyment experiences, this government kept the people of Nepal in crushing poverty.

One of the finest teas in the world is called Darjeeling and comes from India. India was a colony of tea-loving England and while I certainly don’t approve of colonization of other nations, it can’t be said everything that happened in this era was bad. One of the good things was the fostering of the tea industry in India. The English wanted their tea and they created a huge industry in India. The fact for a long while this industry largely benefited the English rather than the people of India is shameful, but eventually the Indian people gained independence and they began to enjoy the fruits of their labor.

Nepal is adjacent to India geographically and also well-suited to tea production. Way back in 1862 the Chinese supposedly gifted Nepal tea seeds and production began. Then something rather tragic happened. The government of Nepal at that time was called the Rana Dynasty. This was an autocratic and totalitarian state to the extreme. They ordered the army to confiscate the first crop of tea in 1873 and tea production in the region essentially ground to a halt.

Why? What is the point of growing tea leaves for anything other than personal use if the government is just going to come and take it away? That’s what happens when a government decides what is best rather than economic factors. If the people of Nepal had been allowed to produce tea on a large scale it would almost certainly have alleviated some of the poverty in that nation, just as it did so in neighboring India. In addition, it would have generated tax revenue far in excess of the value of the tea seized.

Eventually the Rana Dynasty fell from power in the 1950s and a new constitution was written granting people freedom. What was the first thing people started to do? Grow wonderful Orthodox Tea in a climate that is ideal for doing so. The new government pretty much immediately recognized the economic potential of tea and took over the industry. This had some benefits because it encouraged growing tea but the entity that largely profited was the government.

In 1980 Nepal exported about one-hundred and fifty tons of tea annually. Then, only fifteen or so years ago, the government decided to allow individuals and companies to profit from tea production. Nepal now exports nearly five-thousand tons of tea annually. Highly rated Orthodox tea which I had never even heard of until today. Production is rising, no surprise.

Meanwhile private organizations among tea companies have sprung up and tried to ensure producers are adhering to high standards including environmental concerns. The supposedly indispensable role of government.

This nascent tea industry is enriching the people of Nepal, and more importantly from my perspective, allowing me to enjoy a cup of tea. I have yet to sample, so I cannot give you a review. When I make my next order from Tea Gschwendner you can bet there will be at least one batch of Orthodox winging its way to my tea kettle. I can hardly wait.

Tom Liberman

When is One Third Less than One Quarter: at A&W

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A&WI just read an interesting story about a chain restaurant called A&W. It’s been around since 1919 and at its peak had more locations than McDonalds. There are any number of reasons for the decline but one of the more fascinating was the introduction of the Third Pounder in competition with the Quarter Pounder. It failed.

This despite the fact various focus groups found the Third Pounder tasted better than the Quarter Pounder. Also confounding A&W was they sold the Third Pounder at a lower price than the quarter pounder. Why did it fail? A&W management had that same question and they convened more focus groups to explain it to them. “Yes”, they said. “It does taste better than the Quarter Pounder but there’s less meat.”

And thus, we discover the terrible mistake A&W made all those years ago. They priced the Third Pounder less than Quarter Pounder setting up a particular expectation. If you pay more for one product than another, there is some anticipation the more expensive product has something extra. Sometimes that extra might be higher quality, a larger portion, or perhaps better service. In this case there is little chance of better service and higher quality is not really a consideration, so people made the logical deduction. A third must be less than a quarter.

The fact this is not true is irrelevant to the point. I’ve read a number of stories about this incident and the conclusion everyone seems to arrive upon is people in the United States are not very good at math. This is a correct conclusion but it’s not the correct marketing interpretation.

To me, it’s clear the mistake A&W made was pricing the Third Pounder lower than the Quarter Pounder. If they had priced it slightly higher people would more likely have done the math correctly. Now, I could be wrong. One article I read said people made the error because in 1/4 the 4 is a bigger than the 3 in 1/3. It’s certainly possible this is true but I’m skeptical because the fraction is not in the name. It’s called the Third Pounder and its competitor is called the Quarter Pounder.

If I’m correct, this is an extremely important lesson in marketing. It’s something I consider when pricing my books. I’ve been told, by different people, that my price of $2.99 is wrong. Some say it should be $.99 while others suggest $10.99. The argument is interesting. A low price suggests low quality. I agree, that’s why I go with the $2.99 as a compromise. It could well be the wrong choice, I certainly haven’t sold many of my novels.

This story is certainly making me rethink my pricing scheme but that aside, let’s return to the idea that A&W made a marketing mistake. A simple solution to the problem would have been to raise the price on the Third Pounder and see if that alleviated the problem. We’ll never know what would have been the result of such a test.

Still, it’s an insight into human nature. We generally come to the conclusion a higher price means something better, even if it doesn’t. Many marketers take advantage of this and put high prices on lower quality products. It’s important as a consumer to take that into account. We live in an age where you can research any product you are planning to purchase extensively on the internet. Do so.

Meanwhile, there is good news. A&W is making a bit of a comeback. They’ve opened more stores this year than in many years. In addition, they’re now making root beer on site rather than going with syrup and fountains.

Anyone else have a hankering for an old-fashioned root beer float?

Tom Liberman

Maple Syrup and Why We have Government

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maple syrupI just read an interesting article about maple syrup and it gave me insight into why we have government. I’m a Libertarian and sometimes butt heads with Anarchists who hang out in the same Social Media circles as me. When I first read the story about the Federation of Quebec Maple Syrup Producers I was all keyed up to write an anti-government rant, one said Anarchists would have enjoyed. Then I found out it’s not a government organization. It’s purely private. My rant dissipated but there is a story to be told nevertheless.

The FPAQ basically regulates how much maple syrup is produced in the Quebec province of Canada. They do this by limiting the number of trees that can be tapped. This was done back in the 1960’s in order to compete more effectively with United States maple producers. In addition to limiting the amount of maple syrup produced, they keep a strategic reserve in case of crop failure, and sell all the maple syrup as a collective to control prices.

The organization has fundamentally changed the nature of maple syrup production in the world. Before it came into existence, Quebec maple syrup producers were not able to compete with producers in the United States, primarily Vermont. They now control about 70% of the market and export $362 million worth of the sweet, sweet stuff.

My original blog was going to be about how the maple syrup farmers in Quebec are upset by the quotas and how big, bad government was interfering with free enterprise. Oh well, so much for that.

The question then becomes, why did the FPAQ form? Why didn’t each maple syrup producer simple make as much as they wanted and sell it at a price they determined? That’s what us Free Market Libertarian advocate. But here is a case of people quite voluntarily giving up part of their freedom to become, in essence, a government regulatory agency.

The answer is simple. It was in their best interest to do so. By banding together, they created a more powerful entity. By pooling and selling their syrup together, they weren’t constantly undercutting each others’ price. By creating a reserve, they were ensuring a steady stream of revenue in case of a disastrous harvest season. By limiting production, they were driving up prices, creating scarcity where before there was none. And all these worked quite well for them.

Now the United States has been increasing its maple syrup production, taking some of the market back, and the members of the FPAQ are beginning to chafe against the rules. They are selling on the black market and producing more than their quota. They are rebelling against their own organization.

And this is the very root of government. The reason the FPAQ formed is the same reason most governments form. It is much safer for a group of people to organize. Once organized they need structure to ensure everyone is playing by the rules. Thus, government comes into being. The bigger the organization, the more rules are needed. In order to compete and be safe in this world, bigger and bigger organizations are required.

Of course, the pseudo-government grew despotic, as is its nature. It created rules and regulations that were actually hurting its members rather than helping. The members began to rebel.

All this explains why I’m a Libertarian and not an Anarchist. If we destroy one government the result will not be no government, but most likely a despotic regime. Having no government at all is a lovely dream. It is something I think might be possible in the future, when we have endless energy and there is no more scarcity. That day is in the future, sadly.

Government is in our nature. I remain a Libertarian. I think government needs be unobtrusive. The more government intrudes on our lives, largely the worse it is for all of us. But I cannot pretend government exists for no reason. People want government and they create it. Then they rise up and destroy it. Then they create a new one.

Tom Liberman

Best Whiskey or Whatever

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best whiskeyThere is a plethora of phony contests in this world and I recently read a story where some rye whiskey I’ve never heard of was declared the Best Whiskey in the World! I was immediately skeptical.

I got even more doubtful when the article mentioned the distillery has been in operation for about seven years. They purchased the winning whiskey from a Canadian wholesaler and “finished” it later. I’m sure it’s a fine whiskey, but it’s not going to win a more rigorous contest.

This story does give us insight into modern marketing techniques.

Basically, what is happening is someone decides to start a contest. San Francisco World Spirits Competition in this case, but there are thousands of them. They send out invitations to spirit manufacturers all over, mainly boutique companies without a large audience. These invitations come with a price. A steep entry price and then tons of additional fees. Now, I’m not certain that’s the case with this particular event but I’d be willing to wager a bottle of Booker’s it is.

There are so many of these competitions out there it’s becoming quite difficult to separate the legitimate ones from the fly-by-night operations.

I’m a novelist. I’ve written a pretty good number of Sword and Sorcery fantasy novels. Not a week goes by that I don’t get some spam in my inbox inviting me to submit one of my novels to some phony competition for only a $200 entry free. If I were to do so I’d undoubtedly win some prize for which I’d have to pay. Then they’d offer to sell me a marketing kit and a medallion that I can use on my website. All for more money.

That’s the way these contests stay in business. They simply collect money from people who are desperate for publicity. Then the winners, and I use that term loosely, of the contest begin following the marketing kit’s advice and write stories they submit to various publications. Inevitably some of them get accepted and you and I end up reading stories about award winning whiskeys that are nothing of the sort.

Hey, more power to them, I suppose. If some company or individual enters a contest like this they are doing it of their own free will. If someone reads an article in which some unknown whiskey from a seven-year-old distillery is declared best in show they deserve what they get if they shell out $500 for a bottle.

It’s all good old fashioned capitalism. People have always been socially conscious. They’ll purchase something based on its reputation rather than its actual quality. There will be those who want to take advantage of this facet of human nature. They’ll package a wholesale whiskey in a fancy bottle with a bunch of fake awards splattered across their website and sell it at a premium price.

The people who drink it will pat themselves on the back for finding such a marvelous whiskey and eagerly pay for another bottle.

The lesson to be learned here, for those of you who care to listen, is that just because someone says something is the best, doesn’t mean it is.

Of course, if you enjoy it, go out and buy a bottle. You don’t have to listen to this old curmudgeon.

Tom Liberman

Hershey not Filling Candy Boxes

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hersheyAn interesting lawsuit has been filed in my home state of Missouri in which a man claims Hershey is violating the law by underfilling their candy boxes. The reason the case fascinates me is because it brings into question both the manufacturer and the consumer.

The man filing the lawsuit believes the box size is a promise of a certain amount of candy. In a contract situation, this means Hershey has promised to deliver that quantity of candy for the price of the box. If the purchaser is deceived about this amount, then the transaction has not been successfully completed. The person making the purchase is entitled to either the correct amount of candy or a refund on a percentage of their outlay.

On the other hand, Hershey believes the weight of the box is sufficient to inform the customer of the nature of the quantity of candy within. If a customer picks up the box, judges its weight, and gives it a rattle, they are fully aware of how full the box is and Hershey has fulfilled their promise.

I think both sides have a legitimate point. Unlike certain boxed items, candy does not need extra space in order to survive jostling. Things like potato chips need the room in order not to shatter on shipping. Candy does not suffer from this issue and therefore there is only one good reason not to fill the boxes to the top. Hershey is hoping people will be deceived by the size of the box and discount the weight and the rattling factor.

The purpose of the larger boxes is simply to deceive, nothing more and nothing less.

But does this intent to deceive rise to the level of breaking a promise? Certainly, Hershey representatives are correct when they say the consumer is fully aware of the weight of the box and the lack of fullness. You cannot pick up such a container without noticing it is far short of being completely full. If the purchaser was deceived, then aren’t they to blame?

I strongly suspect Hershey will prevail in this lawsuit but I would like to think they could easily fill their boxes and forego the attempt to deceive. I understand they don’t fill the boxes because this strategy has an apparent impact on their bottom line. A box of Whoppers filled only slightly more than halfway means there is the appearance of saving a huge amount of money.

Hershey produces X number of boxes for sale. There is Y amount of product in those boxes. If you decrease Y, this lowers the cost of material to make the candy, the cost of shipping as weight is reduced, and perhaps increases boxes sold because people go through the candy faster and come back for another box.

There is however, another factor. Hershey’s has competition in this world. If people continually get less candy for their money, they can easily go to a competitor for their sweet desires. This underfill strategy might be costing the company a lot of money in the long run. Particularly if their competitors are not engaged in such.

That is the glory of capitalism. Consumers have a tremendous amount of power. Rather than filing lawsuits we can get what we want simply by changing our purchasing habits. Naturally a single person can’t do very much, but if enough people start to abandon Whoppers, you can bet Hershey will start to fill the boxes with more product.

This is even more true in the age of Social Media and the internet. Simply pointing out the discrepancy in the size of the box compared to the amount of candy therein can garner a huge amount of attention. If enough people agree with your assessment and Whoppers’s sales drop significantly in a short period of time, executives at Hershey will notice. They know exactly how many boxes are sold and any decline is something they will immediately attempt to rectify.

A Social Media strategy is likely more powerful than any lawsuit.

The Information Age has put increasing amounts of power in the hands of consumers. Speaking as a Libertarian I say … excellent.

Tom Liberman

Ye Old Town Center, Big Box Stores, Malls, and Online Shopping

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town centerThere was a time in this country when the town center was where people gathered to socialize, shop, and spend their free time. Then along came a fellow named Sam Walton and destroyed the vast majority of them. First it happened in larger communities but eventually Walmart spread to small towns and mom and pop stores went bankrupt in enormous numbers.

A lot of people were upset by this turn of events. Sam Walton was known as the Most Hated Man in America in rural areas and small towns. The people who ran those local stores fought hard. They put up the good fight. They asked their neighbors and friends to shop at their store rather than Walmart even though the price of goods was higher and the selection was smaller. A picture of economic doom and gloom was forecast as more and more small businesses closed and enterprise business began to take a larger share of the market.

With the success of Walmart came all sorts of Big Box stores and Malls. The gathering place for people changed from town centers, which largely became deserted, to malls and large shopping stores. Anyone who had a small business again fought hard. They took out loans. They asked friends and family to remain loyal.

Then the internet arrived and with it online shopping led by Amazon. Social Media blossomed in this Information Age. Now it was the malls and big box stores’ turn to feel the pain. People didn’t need to leave their house to socialize or to purchase most goods. They did due diligence with online research, ordered the product they wanted at the price they liked, and had it in a remarkably short period of time.

The malls are fighting hard. They are now offering more of the sorts of services people can’t get online, things such as haircuts and dining options. The people in the community who are losing their jobs because of online shopping are pleading with their fellow citizens to buy at the mall instead of online, hoping to save jobs.

What does it all mean? All those closed mom and pop stores, all those shuttered malls, all those lost jobs? It means we get a better product, in a timelier fashion, at a lower price, and there are more jobs than ever!

The reason the mom and pop stores died is because they couldn’t compete economically with the big box stores. The reason the malls are dying is because they can’t compete with online shopping. The winner in all of this is you and me.

It hurts when that little shop around the corner closes and the people you know and like lose their jobs. Economics and capitalism is a harsh mistress. They don’t promise wine and roses for everyone. Nothing can make everyone happy all the time. But look around. What can’t you purchase? What thing that you want can’t you have? Yes, there are some things out of your price range, but far fewer than as little as twenty years ago.

The next generation is going to expect this sort of service in the same why we can’t live without a remote for the entertainment center. There is no going backward in this world. You can’t go home again.

You can lament the end of the malls and all the jobs the same way people were upset when all the family owned businesses went under to the tornado that was Sam Walton. Don’t worry, you probably won’t notice because you’ll be busy posting a picture of your new hat on Social Media.

Tom Liberman

Insulin and the Web a Story of Anti-Capitalistic Self-Interest

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insulinWhat do Insulin and the Internet have in common? The person most responsible for each patented the technology and gave it away for free. There is a lesson to be learned for ardent Libertarians and capitalists.

Back in 1922 a fellow named Frederick Banting, later Sir Frederick, managed to extract and purify something called insulin. Eventually, along with partners J. J. R. Macleod, Charles Best, Clark Noble, and biochemist James Collip, he created a version of the drug that did not cause side effects. Soon children in diabetic wards across the world were being injected and waking up. Prior to that discovery, the parents of those children simply waited for them to die. Diabetic shock was essentially a death sentence.

Sir Frederick and his partners then sold the patent for a whopping sum of $3. The reason they did this was to ensure insulin would be available to all at a reasonable price. They put their humanity ahead of their desire to earn money. The drug patent was worth millions, if not billions, of dollars.

You will note even today there is no generic version of insulin because the patent is essentially available to all. Anyone can come up with a method to produce insulin and sell it. They have to pay no one for the right to do so.

Not that long ago a fellow by the name of Tim Berners-Lee, later Sir Tim, was working at the European Organization for Nuclear Research (CERN) as an independent contractor. He came up with an idea called Hypertext which would allow researchers to share and update information. Over the years, he and others expanded on this idea. The result is the World Wide Web.

Eventually, Sir Tim organized the World Wide Web Consortium (W3C) located at the Massachusetts Institute of Technology which oversees all the protocols of the WWW. He made all of his ideas freely available with no patent or royalties due. He did this because he saw how much good the technology could do and wanted to make sure it spread across the world for the benefit of all.

Speaking from a misunderstood interpretation of Libertarian philosophy, it would seem the decisions of these two titans was rather stupid. Both of them could have gained considerable wealth from their discoveries. By giving them away they forsook riches, or so it would seem.
In actual practice, the situation is different. Because of their generosity and humanity, both received many rewards after essentially giving away multi-million dollar ideas. These rewards included a place in history and also financial success. Both men went on to rewarding careers and lives in which they were not only financially successful but renowned throughout the world.

Too often those who espouse a Libertarian philosophy or a Randian mantra, after Ayn Rand, focus on the financial rewards that success brings. This is a mistake. It is important to understand that financial success is only a byproduct of doing great things. There is also the reward of personal satisfaction. There is also the reward of public acclaim. Both of these things are not to be discounted in regards to self-interest.

If you were to do something that changed the world for the better, the personal satisfaction engendered would be of tremendous value to you as you aged. The continuous support you received from those you helped would be an all but endless source of joy and happiness.
Too often in this world we focus on money. It is merely the byproduct of doing good things for those around us. Certainly, there is nothing wrong with financial success and both Sir Tim and Sir Frederick achieved it despite their apparently altruistic goals. Still, I think it’s clear they made the right decisions.

Tom Liberman

Kimberly Guilfoyle and Unseemly Eagerness

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Kimberly GuilfoyleA Fox News personality named Kimberly Guilfoyle is actively admitting she is interviewing to get the job of White House Press Secretary, currently held by Sean Spicer. I suppose I’ll get labeled a Liberal Shill or a Snowflake but this public lobbying for someone else’s job seems pretty gross to me. It’s just a lack of decency.

I mean, I get it, people get fired. Someone takes that job. That’s part of the business and political world. A business has to interview for a position they know is going to be vacant, but everywhere I’ve been it was done quietly. Other people in the office weren’t told about it, and certainly the person interviewing for the promotion didn’t go on Facebook and tell all their friends.

I’m not in the White House making decisions about who to hire for any position. I’m not hiring or firing anyone. My opinion is pretty much worthless in all of this. Still, if it was me, I’d certainly eliminate Guilfoyle as a candidate the moment I saw the interview. If she can’t be discreet enough to keep the talks quiet, then why would I want her working for me?

I suspect, as usual, thoughts about her behavior will be split along political lines, and that’s a shame. All too often we are willing to put up with bad behavior from someone who espouses the same political philosophy as us, while eagerly denouncing those who support the opposite side of the aisle.

When it comes to that sort of situation, I too feel the pressure. More than once, friends of mine who largely agree with my political point of view have spouted off inanities on their Social Media accounts. I always hesitate before saying something. On the occasions I do chastise an ally, I risk their friendship. I try to put my criticisms in a positive way. That doesn’t always work. I’m an abrasive fellow, there is no denying it. I’m not the most popular kid in school.

The problem is that the only people Guilfoyle is going to listen to are those who largely agree with her politics. She certainly won’t let my opinion influence her. It is only if someone with whom she largely agrees and respects sits her down and tells her how deplorable is her behavior, that she will mollify it.

That’s why I think it’s imperative to be critical of those with whom you largely agree when you see them doing something wrong. I think that’s what is largely missing in our current political climate. The ability to be critical of those with whom we find like cause.

And, of course, don’t lobby publicly for someone else’s job.

Tom Liberman

The Glory of the Vending Machine

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vending machineI’ve long been a fan of vending machines. They allow people to purchase products they desire without interference from outside agencies. This ability to get what I want is a wonderful manifestation of capitalism. This is empowerment.

The glory of the vending machine is, much like that of online shopping, you get to purchase a product without interacting with anyone. It has the added advantage of immediacy. This is the way life should be. You should be able to purchase the product you want, when you want, and be able to enjoy it immediately.

This is capitalism at its finest.

I just read about a new vending machine on a college campus that dispenses Plan B birth control as well as other products like allergy medication and feminine hygiene items. Another article I read was about the plethora of smart vending machines that are soon to be in markets everywhere.

I’m envious of vending machines in other countries around the world. In Japan and Germany, you can get beer from a vending machine. In France, you can get a baguette. There is a vending machine in China which dispenses live crabs! I imagine 3D Printers embedded in such machines.

Vending machine technology continues to improve and soon we will be able to use money in our various accounts directly with the machine. This allows us to not only get what we want but also gives autonomy to others.

For example, perhaps a parent wants their child to be able to purchase $100 worth of food while at camp. Maybe a supervisor want a quick and easy way to reward an employee for some achievement. A couple of clicks and their card has a $5 credit at the ice cream vending machine. Maybe teachers want to reward students for good grades. I can see a time when vending machines recognize you and dispense medication and other regulated items.

Naturally there are concerns about security in these cases, I don’t deny as much. Still, I see more and more vending machines with a variety of products making their way into our lives.

As the technology gets better and the quality of the items in the vending machines improves, I see no end to the possibilities.

In addition, the machines will keep track of purchases allowing them to understand what the customer wants. They will send this information back to the vendor. The vendor will load trucks specifically designed for each particular machine with the exact quantity need.

This improves inventory control and means more profit for the company and lower prices for the consumer.

At the heart of vending machine industry, we see consumers getting the product they want at an acceptable cost and in a timely fashion.
It’s really that simple and vending machines are a beautiful symbol of capitalism.

Tom Liberman

It is National Fill in the Blank Day and that is Good

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national holidayThis month is apparently National Hamburger Month. At least that’s what Facebook tells me. Or more accurately, one of my friends on Facebook.

These things are often called Hallmark Holidays because they encourage people to purchase greeting cards. Hallmark denies responsibility for this phenomenon, but it cannot be denied it exists. The commercialization of various products is largely the reason such days litter our social media walls. Every industry worth their salt … hey, is there a National Salt Day? Let’s find out! Off to the internet.

Now, I want you to know this was a complete coincidence. I’m writing this post on May 12, 2017 and I just found out National Salt Day is May 17! That is hilarious. There is also National Salt Awareness week in late February and early March but that is actually a holiday trying to keep us from buying something. So, it doesn’t count.

Is there any end in sight? A simple answer, no. As long as there is profit to be made, we’ll have more and more of these consumer holidays. And, to be honest, it’s not a bad thing. If a company wants to promote their product and they find a good way to do it, why shouldn’t they? No one is forced to purchase Salt on National Salt day. You don’t have to buy a Mother’s Day card, flowers, or candy. Consumerism is a wonderful thing because it is largely voluntary. We buy things we want.

It is only when capitalism is constrained that we should start to be worried. When one company is not allowed to sell their product because it competes with another favored by the leaders of a country, then there is a problem.

We buy the things we want because they are priced attractively. This is the very nature of consumerism. We too often blame the corporate world for causing us to eat too much, go too far into debt, or something else related to capitalism. I won’t deny these things exist. We have an unhealthy population in the United States because of abundantly available food of a type we like. People go into debt because they want things, this overwhelms their financial good sense.

If I happened to want a nice hamburger, I might use the excuse that this is National Hamburger Week to purchase one. I’d be interested in seeing the metrics involved with many of these new holidays. Certainly, we see an enormous uptick in sales of flowers around Mother’s Day and ties around Father’s Day. If not, we wouldn’t see all these new holidays appearing on our calendar.

Naturally they are somewhat self-defeating in that as we see more and more of these holidays appear, we become inured to them. That’s perfectly normal as well and eventually someone will find a new way to market their product.

Here is an interesting theoretical question. If the government banned such days, would it reduce consumption of that particular item? I think the answer is yes, but no one is calling for such bans. Mother’s Day is a huge boon for the flower industry but we don’t see consumer protection groups advocating the end of the holiday to prevent people from spending their money.

On the other hand, we do see all kinds of groups promoting the outlawing of particular items, be they drugs or simply large soda containers. The thrust of these laws is that we don’t know what is good for ourselves. That we lack the impulse control to stop self-destructive purchases. This is true. We do lack such control, but solutions based on legal remedies are doomed to fail.

We must teach people impulse control. We must educate them on financial realities. These are the methods by which we improve the lives of citizens, by helping them improve themselves.

It’s just not the role of government to protect us from ourselves, or made up national holidays.

Tom Liberman

Why is Stealth Marketing Illegal?

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stealth marketingThe Federal Trade Commission is apparently quite concerned people are mentioning they like particular products without revealing they are paid for these remarks. It’s called Stealth Marketing. Basically, someone who has a large number of Social Media followers is paid by a business to mention a particular product.

The FTC requires that people who do so use #ad or #sponsor to indicate they are being paid for their opinion. Why does it matter? Why would government feel the need to secure us from this apparently dire threat?

Certainly, there is all sorts of Stealth Marketing going on in movies and television shows from which the government does not see fit to protect us. In addition, every time an athlete wears a jersey or shirt, swings a golf club, or hits a ball it is an advertisement for the apparel company that pays the university, league, or athlete. Every time an actor wears particular clothes to some award ceremony it is because they are paid to do so.

I could ask why there is apparently a different standard for the two but I just don’t care. Why on earth does the government care? Why is it against the law? It’s utter insanity. The government, as usual, couches their blatant interference in terms of protecting us. If we don’t force them to tell you they are paid sponsors, you won’t know! We’re doing it to save you from them!

In reality it is just another way for the government to justify its existence. There are apparently people at the FTC spending their time monitoring this situation and we pay the salaries of those people. Congress likely had to have hearings and who knows how much time went into writing these regulations. All to what end? From what are we being protected? Who does Stealth Marketing hurt?

Who cares if a celebrity says they like something on their Twitter account and they are being paid to do so? How is ensuring we know it’s an advertisement any different? I think Emily Blunt is a talented actress. If she happens to endorse Yves Saint Laurent Opium perform why do I care if she mentions it in a Twitter post as opposed to a commercial? Wait, there is a fragrance called Opium? Seriously? That’s awesome. I’m surprised the government hasn’t outlawed that.

Will I suddenly be less inclined to buy a product that a celebrity I admire uses if I know they are sponsored by the manufacturer? Gosh, I was all set to by that Opium perfume for my pretend girlfriend Emily Blunt but I found out she really doesn’t use it. She just shills for it on television. Now I won’t. Thank you, government for saving me from this terrible decision to purchase a product of my own free will.

I reiterate, who cares? Why do we care? What business is it of the government to tell a person they must reveal if they are just saying they enjoy a product or if they are being paid to say they enjoy a product? What’s the practical difference?

Who is hurt? The consumer is purchasing a product that was promoted. Whether it’s a paid promotion or a genuine promotion is irrelevant.

The people of the United States are fully capable of making their purchasing decisions without being protected by the government.

Tom Liberman

Parking Tickets Shouldn’t be the Cost of Doing Business

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parking ticketsThe city of New York is crowded and parking is at a premium. Because of this the city rakes in millions of dollars in revenue from parking tickets. How many millions? Over $500 million last year and on pace to top that by $100 million this year. For companies that have to work in the city, this is largely considered to be a business expense. Want to work in New York city? Put a few thousand in the budget for parking fines.

You can’t provide a service in the city without racking up thousands of dollars in parking tickets. Tickets are such an important factor in doing business in the city that they actually created an industry of their own, people who get the fines reduced or removed. All for what? Money. That’s a big problem. A business wants to make money and this is a good and normal thing. The role of government is far different.

One of the primary functions of municipal government is to make life better for those who live and do business in the city. It is not to harass them and fund government coffers with fines. I understand the city is crowded and people will park illegally. However, I wonder how many lovely parking lots could be built for $500 million?

That’s what a responsible government does. It sees a need that can’t easily be solved by local businesses and people and goes about fixing the problem. At least that is what government is supposed to be about. Naturally, government has simply become a money churning machine. It takes money from citizens and redistributes it to a chosen few.

When government pursues a course of action simply designed to sustain itself, it has failed. Yes, parking in cities like New York, Chicago, London, Mexico City, and other crowded metropolis’s is a serious problem. So is traffic. The function of government is to resolve these issues, not profit off of them. The city of New York issues citation for good reason. When cars and trucks are parked illegally, it causes congestion on the roads. Businesses use vehicles to delivery their goods and transport personnel from one location to another. Parking is all but impossible to find because there are far too many vehicles and not enough parking spaces.

The answer is not easy. Every parking lot takes up space which otherwise might be used for a residence or business. Underground parking lots are expensive. That being said there must be creative solutions available. Perhaps a massive parking lot in central New York built underground with rentable powered sleds that allow transport of large items a nominal distance. The lot has a small fee associated with it paying for upkeep and monitoring. I find it impossible to believe the many people who do business in the city wouldn’t be happy to use such a lot, rather than pay fines and clog up traffic.

In addition, it means fewer people must be employed by the government to issue the parking tickets. To roam the city continuously looking for violations. Fewer people must process the tickets.

The end result is always an incredibly important consideration. If the businesses that work in the city simply assume paying parking tickets are part of standard operations, that means traffic gets clogged up anyway. The tickets aren’t successfully achieving the desired result.

Creative solutions to parking issues isn’t my specialty, I admit as much. But I imagine, with absolute conviction, that $500 million might well be able to create and maintain solutions that not only unburden those doing business in the city but also help those who must get from Point A to Point B by actually helping alleviate the traffic problems.

I’m certain there are other people with great ideas out there that don’t involve tickets, but I’m not sure the municipal governments want to consider them. That’s a shame, for all us.

Tom Liberman

Sears was too Big to Fail but It Did

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SearsI’d guess the majority of people under my age, fifty-two, don’t remember how dominate Sears, Roebuck and Company was in the retail industry. Sears was enormous. Too Big to Fail according to a metric that seems to be prevalent in this political era. Sears has pretty much failed and it hasn’t affected the economy or jobs in a significant way. There’s a lesson to be learned in that.

First let’s take a look at how dominant was Sears prior to the Wal-Mart and Internet era. At the turn of the century, that’s nineteenth century youngsters, people purchased things from their local general store. The selection was limited and the price was exorbitant. Then came the Sears Catalog. It changed everything in the same way as did Amazon and online shopping. People no longer had to rely on their local store. People simply sent an order form in and, within a few weeks, they had their item. It was revolutionary. It was the beginning of the end for small stores across what was then the largely rural United States.

Sears grew from that initial catalog until they were the dominant retail sales company in the country. There were, and remain, Sears stores in every city. The Sears Tower was for a time the largest building in the world. They employed huge numbers of people and their sales methods allowed others all over the country to purchase the goods they wanted at an affordable price.

I feel confident suggesting that if someone back in 1980 told Congress Sears was going to fail, there would have been panic. The thought of all those lost jobs and the fact that so many wouldn’t be able to purchase cheap goods would have caused an immediate effect. We would have seen a rush of public committee meetings, speeches about how vital was Sears to the economy, and a plethora of grim looking politicians pledging to save us from this impending disaster.

Happily, no one knew. Wal-Mart came along. The Internet came along. Sears pursued a bad business model and now they stand on the brink of insolvency. They are closing stores all over the country but, and this is important, politicians don’t care. It’s the natural course of business in their eyes and, for once, they are right.

Businesses fail. When executives make poor decisions, when the nature of the market changes, when circumstances and luck go against it, a business fails. The vital factor is that it failed for reasons. Another business model can succeed and provide profit, and people who pursue a good strategy will fill the void.

If the car manufacturers had been allowed to fail someone else would have stepped up to take their place. If the financial institutions that badly managed their affairs had been allowed to fail, others would have ably stepped up to replace them. For every job lost to the failing company, another one would have been created, if not two.

There is no such thing as too big to fail. What exists is too much vested interest in politics. The businesses that were going to fail had the Democratic and Republican Nation parties in their pockets. It was in the interest of the two major political parties to save those companies. The politicians and their parties don’t want the gravy train to stop.

The lesson to be learned is that there is no too big to fail. Failure is as much a part of capitalism as is success. Where one business fails, for whatever reason, another arises with a better model. Where one job goes away, two more appear.

Does it hurt for those who lose their job? Is it painful for the executives who have failed? Yes.

That’s capitalism.

Tom Liberman

Hotel Lobbyist Set out to Destroy Expedia and Priceline

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hotelHotel Lobbyist are trying to destroy competitors with good old American Ingenuity, Twenty-First Century style. In the old days, we made better products. Today we simply lobby Congress to legislate our rivals out of existence.

Do you like booking your travel adventures through sites like Expedia or Priceline? If you do then you are one of many. It’s incredibly convenient and allows you to shop around quite easily. Instead of visiting the websites of dozens of hotels looking for a good price; all the information you need is in one place. This means you generally get a good price for your travel. Can you guess who doesn’t like that?

The hotel industry, of course. They’d prefer if you had to pick your room with as little information as possible about the price. It serves their interest if you pay more than the lowest rate. They don’t want you to know you can get the same room at a nearby hotel for a lower price. They don’t want you to know they are actually selling their vacancies at lower prices. They also don’t want to pay Expedia and Priceline when you book a room through them. That’s fine. That’s in their interest. What’s not fine is how they hope to resolve this issue.

The American Hotel and Lodging Association is planning to lobby Congress with the aim of getting the websites Expedia and Priceline dramatically restricted if not outlawed. The government agency that has oversight over this industry is the Federal Trade Commission. I find it a travesty this group has the right to tell hotels and travel sites how to conduct business, but I’ll save that rant for another day.

The argument AHLA makes is that Expedia and Priceline represent a monopoly on the travel business. That the various hotels are forced to go through them to list their rooms because there are no other options. Expedia and Priceline charge a fee to the hotel when a customer books a room through their agency. The hotels would, obviously, like to avoid that fee and have you book directly with them.

The goal is to have the current administration appoint friendly members to the FTC in order to get regulations passed that will hamper Expedia and Priceline.

I could spend a lot of time arguing the merits, or lack thereof, of this case but I’d like to keep my focus on the methods. This is standard operating procedure in the modern business world. Lobby government officials to change the rules to benefit you. That’s the most effective method of growing a business these days.

This is a product of government oversight. If the FTC didn’t have the ability to regulate the hotel industry then the entire problem disappears. At that point, the AHLA doesn’t have the ability to destroy their competitors through legislation. The argument is that we need such regulation to keep people safe from the predatory nature of those in businesses. The problem is such regulations have long since gone from protecting people to protecting the very industry they are designed to regulate.

This is the way business is done. Government can destroy competitors far more readily than can the difficult process of providing a great product at a price people want. Crony Capitalism is its name and it is spreading quickly.

The more power we vest in government to regulate us, the more interest business has in perverting government to protect them instead. When it’s easier and cheaper to destroy an enemy by lobbying Congress than practicing good business models, people lose.

How will it effect your financial well-being if these plans succeed? Something to consider.

Tom Liberman

Too Much Alcohol in Bombay Sapphire

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bombay sapphireThe Canadian Food Inspection Agency recently issued a recall order of a batch of the delightful, I speak from personal experience, Bombay Sapphire Gin. It turns out one batch was bottled before it was diluted leaving it at double the alcohol content. Jokes aside, having twice as much alcohol in a bottle is a dangerous situation. People will drink far more alcohol than intend. The recall is appropriate.

Now, I’m a Libertarian so you’re probably asking yourself why I would be talking about this situation. It seems to be an advertisement for government oversight. What the headlines and even the articles themselves fail to mention is who noticed the problem and reported it. It wasn’t until I actually followed the links back to the recall statement itself that I found out what I suspected the moment I read the headline. Bacardi themselves discovered the error and reported it.

I strongly suspect most people will assume exactly the opposite. People will believe the CFIA routinely tests all batches of food and alcohol and they noticed the issue. Nothing could be further from the truth. The agency doesn’t have anywhere near the money or facilities to perform that kind of testing. They rely on reports of illness and the vendors themselves.

This illusion the CFIA, or a similar agency, is on the watch looking for any contamination or other problem with your food gives the impression of safety. It doesn’t actually make you any safer. The people of Canada are no safer today than if Bacardi themselves had issued the alert. The same goes for almost every case of food poisoning. The agency issuing the alert is merely following up reports that would have made their way to the media in any case.

It’s in Bacardi’s self-interest to report the problem. If someone drank too much of the doubled content and died, the lawsuit to follow would dwarf the cost of the recall. Not to mention the fact the executives at Bacardi are quite likely decent human beings. They don’t want to hurt anyone. They want to provide a product that people enjoy, and do they ever!

I won’t deny that in some situations a cover-up occurs when some terrible oversight happens. But the agency doesn’t even help in that situation. If Bacardi hadn’t reported the problem to begin with, there is no way the CFIA would have noticed unless people started to talk about the issue. And if that had happened, it would have spread around the internet like wildfire.

Public perception is my problem with this entire incident. The article gives a completely false impression about what happened. It would have been so easy to explain the reality of the event within the article. I will give credit to the CFIA who mention this reality in their alert.
And, for full disclosure, I prefer my Bombay Sapphire Martini made in the following way.

Gin should be stored at room temperature. Pour dry vermouth in shaker with ice. Shake lightly. Pour out vermouth leaving residue behind. Pour in Bombay Sapphire. Shake vigorously until intensely cold. This waters down the gin taking off the edge while infusing the remaining vermouth nicely. Pour in martini glass, add green olive. Serve. Enjoy.

Tom Liberman

State Regulated Barber Poles in New Hampshire

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barber polesYep. You read correctly. The New Hampshire Board of Barbering, Cosmetology and Esthetics is on the streets keeping America safe from rogue barber poles. You are only allowed to display the red, white, and blue striped pole if you have a license to be a barber in the state of New Hampshire. Mere cosmetologists, who have their own regulatory rules, do not meet the standard.

This is a microcosm of the government in the United States. We have regulatory boards for virtually every business that exists. In order to practice you must have a state license. The rational given for all of this oversight is that it is needed for your safety. The state must protect you from people who call themselves barbers, but are actually only cosmetologists. It’s the same for massage therapists and your trainer at the gym.

What’s the real reason for all these agencies? For the regulation of barber poles? Money, power, and competition suppression.

The state generates enormous sums of money by charging yearly licensing fees to all these businesses. They use your tax dollars to pay the employees of these agencies. They charge more money forcing people to pass ridiculous tests to prove they can actually perform their jobs.

And then there is the power aspect. There are those charged with enforcing these ludicrous regulations and it tickles their fancy to roam about and issue citations to anyone who dares flaunt the law. They get little badges and ticket books. Their salary is paid for by the very people they harass. I’m sure there are plenty of very reasonable inspectors who don’t enforce the letter of their regulations on anyone who annoys them, but I’m equally certain that many who enjoy harassing citizens. Who among us hasn’t encountered an unreasonable and petty inspector who enjoyed making us squirm?

Finally, there is simply the fact that large and enterprise businesses are much more capable of paying all these fees and abiding by all these regulations. These regulations crush small businesses. They stifle competition for larger companies who have armies of lawyers and deep pocketed lobbyists. These enterprise businesses often end up actually writing the regulations with wording designed specifically to crush competition. They then pay the bills for legislators who in return for this favor, create the laws.

These supposed tests that ensure a practitioner is qualified? I know a little about them as well. I was in the IT industry and I had to pass all sorts of certification tests in order to be qualified to do my job. The way you pass the test is to purchase practice tests. These tests are made by companies who send in fake test takers, who relay the questions to the company, who in turn make a practice test that is pretty much exactly the same as the real test, and then sell it to potential test takers.

Let’s imagine for one crazy moment that we don’t have a Board of Barbering, Cosmetology and Esthetics. Let’s imagine someone becomes a cosmetologist or barber without going through the proper training and certification. Perhaps a barber stabs you in the eye with scissors or scalds your face with a towel that is too hot. Perhaps a cosmetologist uses hair coloring that leaves you bald. These outcomes are terrible to be certain, but do these boards and regulatory committees actually prevent them from happening?

That is the gist of the government’s argument. That by licensing massage therapists and taxi-cab drivers, it is protecting you from incompetence. The problem is that injuries happen despite these supposed safeguards. Just because someone is licensed doesn’t mean they actually know what they are doing. Just because someone is licensed doesn’t mean they can’t flee from a lawsuit.

Another important factor is the Information Age in which we find ourselves. If you are an unskilled barber or cosmetologist it will quickly get out. A few bad reviews and your business can be all but ruined. Let the buyer beware has never been truer than it is today. We have so much information at our fingertips, there really isn’t an excuse for ill-informed purchases.

The bottom line is: Never have we needed oversight less and never have we had it more.

Tom Liberman

Unicorn Against Unicorn and Colorful Lawsuits

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unicorn-frappuccinoWhy do people file lawsuits? To win you say? I don’t think that’s always the case, and a recent kerfuffle between a Starbucks, who has a drink called the Unicorn Frappuccino, and a small Brooklyn café selling a drink called the Unicorn Frappe illustrates the point. The End Brooklyn filed a trademark on their drink and has now instigated an infringement case against Starbucks.

The thing that struck me about this lawsuit is what I perceive to be the ends desired. I won’t bore you with a lot of trademark law but basically, The End Brooklyn cannot trademark a drink. They can trademark the name, logo, and slogan associated with said drink. Sadly, the Unicorn part of the name is a pretty generic word. If they had called it the Brooklycorn or something like that, and Starbucks gave theirs the same name, there would be a legal case.

I’m pretty certain The Brooklyn End has no intentions of winning the infringement case. They are well aware Starbucks will be able to continue selling their Unicorn Frappuccino. By now you’re probably beginning to understand where I’m heading with all this. The Brooklyn End gets an enormous amount of publicity for the cost of filing the lawsuit.

The story is making headlines, and arousing passionate comments, in any number of news sites. The cost of this sort of promotion would likely be in the millions of dollars. I, and I’m certain most of the people reading this, had never heard of The Brooklyn End before today. I would most likely have spent the rest of my life in ignorance of this café. Now, I live in St. Louis so there is little chance I’ll visit the establishment in question and spend my hard-earned dollars there. Frankly, I’m a tea drinker anyway. That being said, I’m certain people who do live in that region of the country are now aware of the business.

There is every chance sales of the Unicorn Frappe will rise dramatically because of this lawsuit. It seems obvious to me that was the plan all along. I’m not criticizing The Brooklyn End nor am I being critical of our legal system. What the café is doing is both legal and crafty. Filing the infringement case costs money, there is some chance it will be found frivolous and they might end up paying any fees Starbucks accumulates. I’m certain Starbucks has many competent attorneys at the ready and is not particularly troubled by the case.

It’s a calculated business decision. Is the potential cost of the infringement case more than will be made in increased sales of the drink? If so, it was a mistake. If, on the other hand, sales of the drink are far greater than the cost of the suit then it was a good decision.

This is why we have laws against frivolous suits. The attorney who filed the lawsuit for The Brooklyn End might face serious sanctions if it is determined that it was filed in a frivolous manner.

I eagerly await an outcome to this colorful case.

Tom Liberman